Silkey v. Investors Diversified Services, Inc.

In 1983, Herschel and Wanda Silkey (plaintiffs) invested $100,000 in a real estate venture recommended by Mark Powers as a representative of Investors Diversified Services, Inc. (collectively, the brokers) (defendants). The investment did not perform as the Silkeys expected, and they sued the brokers. The trial court ordered the parties to mediation. In January 1996, the parties attended the mediation and reached an oral settlement agreement, which was recited and recorded on an audiotape. Later, the tape was transcribed, and all parties received a copy of the written transcription. The agreement called for the brokers to make an immediate cash payment to the Silkeys. Then, if the real estate investment did not pay a certain dividend (the guaranteed amount), the brokers were obligated to pay an additional sum to the Silkeys on or before January 31, 2001, to match the guaranteed amount. The trial court, having been informed of the settlement, took the scheduled trial off the court’s calendar. Thereafter, the Silkeys refused to sign a written settlement agreement and release. The brokers filed a motion to enforce the settlement agreement, which the court granted. The Silkeys appealed, arguing that they could repudiate the oral agreement. The Silkeys relied on the court’s Rules of Alternative Dispute Resolution (ADR rules), which provided that “[i]f an agreement is reached, it shall be reduced to writing and signed,” the agreement was required to be filed with the court so that the parties could obtain a joint stipulated order, and any breach of an order could result in sanctions or court-ordered remedies. The Silkeys also argued that the oral agreement did not comply with the statute of frauds.